Question

An employer has narrowed a list of applicants down to two individuals. The two candidates look nearly identical on paper, but one of them has earned a four-year college degree. The employer decides to offer employment to the college graduate. What does this example illustrate?(1 point)
Responses

the substitution effect
the substitution effect

the learning effect
the learning effect

the screening effect
the screening effect

the income effect
the income effect
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Answer 1

The screening effect — education is being used as a signal to screen applicants, not necessarily because it raised productivity.